The Texas Workforce Commission reported that the state added 7,100 jobs in February, which was the smallest monthly job gain since October 2011. The biggest hit came in the oil industry where 6,900 jobs were lost in January and February.

Low crude prices means reduced activity and the decreased demand for oilfield equipment and services means layoffs for many companies that service producers. These companies are reporting significant revenue losses as drilling activity and oil prices have steadily declined. Recent layoffs in the service sector include:

Offshore drilling contractor Seadrill will cut 159 jobs

Tenaris will cut 133 workers from its northwest Houston plant

AFGlobal Corp. will cut 89 workers from the company’s North Houston facility

DHW Well Service Inc. will cut 55 workers from a fabrication shop in Victoria

Gov. Greg Abbott issued a statement saying Texas “continues to be a model for economic growth and prosperity across the nation. However, there is more we can and must do. I am working with the legislature to ensure we pass legislation that lowers the tax burden on businesses, guarantees long-term funding for transportation, and provides economic development opportunities – including in higher education – to further diversify our economy. “

Despite the slowed job growth, the Texas consumer confidence index increased 4.7 percent over this time last year and the state’s unemployment rate dropped to 4.3 percent, down from 4.4 percent in January 2015.

As the largest oil producing state in the country, Texas surely will feel the effects. But, exactly how are low oil prices affecting the Texas economy? As it turns out, Texas may not be as vulnerable as first imagined.

Analyst Robert Fitch (via Texas Monthly) believes that, “States that host large oil production operations but derive a modest share of revenue from oil production, like California, Colorado, and Texas, benefit from significant economic diversity and losses in oil revenue will likely be offset by boosts in consumer-driven tax revenue.”

In Texas, oil and gas taxes are only 9 percent of the state’s general fund, vastly lower than that of other energy states such as Alaska (79%) North Dakota (46%) and Wyoming (40%). The energy industry has always been a dominant force in Texas, but since a similar crisis in the 80s, we have worked to build a much more diverse economy that no longer relies solely on oil to thrive.

The following overview gives the latest statistics for how Texas compares to the rest of the country on some key economic indicators (updated 3/6/15).

Jobs

UNITED STATES: 257,000 nonfarm jobs added in January 2015 and the unemployment rate was 5.6%.

TEXAS: Nonfarm employment increased by 41,100 jobs during December 2014. During 2014 total nonfarm employment increased by 457,900 jobs or 3.886%t. Texas unemployment rate was 4.6% for December 2014, down from 6.0% in December 2013 and has been at or below the national rate for 96 consecutive months.

Confidence Index

The U.S. consumer confidence index was 96.4 in February 2015, down 7.1% from January 2015

The Texas region’s consumer confidence index was 117.0 in February 2015, up 0.3% percent from January 2015, and 4.7 percent higher than one year ago.

Taxes

Sales tax collections in fiscal 2015 through January were 11.2% above collections for the same period in fiscal 2014.

Texas motor vehicle sales and rental tax collections for January 2015 were up 15.9% from January 2014

With oil now below $70 per barrel, oil industry workers in Texas should anticipate a decline in exploration and drilling in certain areas and hence a slowdown in employment.

Oil exploration and production accounts for about 10% of the Texas economy. At lower sustained oil prices, some operators will scale back their drilling programs in development areas across the state, which will in effect reduce spending in the oil sector, and have an impact on industries connected to the oil patch (i.e. steel and transportation).

Currently, the vast majority of Eagle Ford operators do not appear to be changing course next quarter, but last month, at least one Eagle Ford player, Clayton Williams, indicated it’s considering scaling back its drilling program in 2015 due to the “pullback” in oil prices.

The good news is there are many areas in the Eagle Ford Shale where drilling and exploration are profitable well below the current benchmark price (West Texas Intermediate or WTI) of ~$67.00 per barrel.

Analysts predict the Karnes Trough, one of the best areas of the play, would be profitable, even if oil prices fell into the $40s range. In certain other liquids-rich areas of the play, breakeven oil prices are between $50 – $60 per barrel.

But there is a large variance in the well qualities across the Eagle Ford, with breakeven prices in several places above the current price of WTI.

Why the Price of Oil is Falling

Since June of this year, oil prices have been falling for a variety of reasons. The shale oil boom, for instance, has increased the supply of oil worldwide, while demand has gone down in China, the world’s second largest oil consumer. But the main reason oil prices are dropping can be traced back to OPEC, which announced last week it would not cut its oil production to shore up oil prices.

You may be curious to know exactly how some folks are getting rich from the Texas oil boom, and better yet, what you can do to ride the wave.

The KPRC-TV report provides a concise look at how development of the oil-rich Eagle Ford formation has brought wealth to the small South Texas town of Three Rivers. The story also provides a hint at an industry segment some locals suggest would be a money-maker.

Boom Times in Three Rivers, TX

Prior to the beginning of the boom in 2008, Three Rivers, which is about 70 miles South of San Antonio, TX, was a sleepy little town, but that has all changed. For local residents “oil money” has changed their lives and the town in which they live. Recently, Three Rivers built an $11-million dollar junior-senior high school from tax revenues derived from oil & gas development. And some locals with mineral rightsin the area have benefitted greatly from lease bonuses and “mailbox money” (i.e. royalty payments) from oil & gas production.

According to the University of Texas at San Antonio, the Eagle Ford Shale had a $61 billion economic impact across a 20-county area in 2012. That’s a big chunk of change, and the money is mostly funneling into the pockets of oil & gas company executives, tertiary industry, the general workforce, mineral owners, investors and shrewd businessmen.

Getting Rich from the Eagle Ford Shale

So, the question is, what can you do to make money from the Eagle Ford boom? The best thing to do now for the majority of folks is go to work in the field, or open a business that serves the needs of the workforce. Certainly, everyone has different circumstances to consider, and not everyone has the necessary capital to open a business, but the money is there for the taking – you just have to be willing to work hard for it.

Oil patch jobs have provided individuals and families with lucrative salaries. Some rig workers can make upwards of 80k – 120k annually. Experience counts for certain positions, but entry-level opportunities can still be had as development continues to ramp up in the region. CDL Drivers are also in high demand in the Eagle Ford for hauling crude, supplies, frack water, etc. Their salaries can also top six figures.

Due to Eagle Ford development being concentrated in mainly remote areas, a growing workforce exists without access to a wide variety of amenities (i.e. washaterias, restaurants, grocery stores, etc.). Opportunities for investors to get on-board with projects in the service industry have the potential for paying off, atleast up-front while there is less competition.